The Lawyer, the Engineer, and the Gigger: § 199A Framed as an Equitable Deduction for Middle-Class Business Owners and Gig Economy Workers

Section 199A of the Tax Cuts and Jobs Act provides owners of noncorporate, pass-through businesses such as sole proprietorships, partnerships, and S corporations-as well as independent contractors and certain trusts-with an unprecedented deduction of up to 20 percent of qualified business income. But the statute draws distinctions between industries and professions, thus creating inequities without a well-articulated policy rationale. Section 199A\u27s critics have called for the provision\u27s repeal entirely, citing efficiency and equity concerns. But Congress should not repeal section 199A or allow it to sunset in 2025. The provision can potentially provide tax relief to gig economy workers, for whom the current U.S. tax regime is outmoded. Instead, Congress should amend the statute so that the phase-in rules apply to all sole proprietors, independent contractors, and owners of noncorporate businesses with income above the phase­-in level. Congress should also lower the threshold amount, thus giving the deduction the appearance of a tax break for middle-class American business owners. Taken with the Treasury Department\u27s final regulations, which cinched many of the original statute\u27s gamesmanship opportunities, these amendments would greatly reduce section 199A\u27s current inequitable position